of major stories, both inside and outside the world of business this morning. scott cohen is going to join us from boston in just a few minutes. but we begin this morning with a deadly explosion at a tkts fertilizer plant. firefighters were battling a blaze at the plant near waco at the time of that blast. more than 100 people are injured and they are trying to figure out exactly what's going on. dozens are dead. many people, including first responders, are unaccounted for at this point. dozens of homes are destroyed and many buildings around it, as well. nbc's david scott reports from texas. >> cell phone video submitted to nbc affiliate kxas shows the fireball, the blast ripping through the west fertilizer plant in is texas. >> it was fully engulfed when i arrived. >> firefighters were on the scene as well as ems when the explosion occurred. >> i have to idea how many ems people may be hurt. >> a blast so strong, many

thought it was an earthquake. >> massive, just like iraq, just like the murray building in oklahoma city. same kind, anhydrous exploded. you can imagine what kind of damage we're looking at there. >> 75 buildings, including homes, a middle school and nursing home damaged or destroyed. >> we're going house to house, business to business, and we're seeing quite a bit of devastation in that area. >> we've got a lot of people still trapped in houses, but that's dangerous material. that's hazardous material. we can't get to them. >> a triage center was established at a local high school, but later evacuated for fear of a second explosion. >> right now, we have tremendous amount of injuries, probably over a hundred injuries at this time. >> fires by the blast burned into the morning. those fires and possible dangerous fumes preventing emergency workers from searching the rubble. david scott, nbc news, west, texas. >> still a lot of unanswered

questions, but we will continue to bring you the story and bring you live updates from texas throughout the show. right now, why don't we get to the latest on that investigation into boston. >> let's get to that investigation into the boston marathon bombing. a suspect has been spotted on security video taken before the two blasts, but no arrest has been made. cnbc's senior correspondent skoet cohen is live in boston. i has the latest for us. good morning, scott. >> good morning, andrew. let me correct you, it is not necessarily a suspect that authorities are talking about, but it is certainly somebody that they want to talk to. on the south end of boston at the cathedral of the holy cross, people are lining up for an interface memorial service that will begin five hours from now at 11:00 eastern time, featuring president obama. massachusetts governor and the boston mayor as well as yoyo ma, and mitt romney, long time boston resident will be in

attendance. meantime, all around downtown, memorials are cropping up, makeshift memorials. there are flowers everywhere, jerseys hanging along the police barricades and a sign on one of the buildings that says boston doesn't blink. training for 2014 begins now. all of this comes this day of remembrance after a day of breakthroughs yesterday. and the breakthroughs include images, so many images available. this is one of them that was obtained by our nbc affiliate whdh that shows what appears to be a bag at the site of one of the blasts. that could be the bomb. there is also video that has not been released yet, an image of a man believed to be around six feet tall in a white or off white baseball cap that is certainly some of these authorities want to talk to. this video shows this individual putting a bag down near the

scene of the second blast. some of the best pictures come from the surveillance camera on the front of the lord and taylor store, which is directly across the street from the site of the second blast. but there were three other surveillance cameras, at least, that were trained on the finish line that were monitored by the boston athletic association which stages the marathon and all sorts of cell phone video that the authorities were asking for and they say there was a tremendous response. so we'll see if we get any more information on these breakthroughs and this potential person of interest that authorities are looking for today. a news conference that was scheduled and repeatedly postponed yesterday, never did happen, we assume it will happen sometime today. guys. >> scott, there's been a number of pictures that have been published over the past 24 hours, online and elsewhere. do you know if any of those pictures are accurate? and there seems to be different pictures. >> i'm not sure exactly what -- >> in today's new york post, there's two pictures of two

gentlemen that are right here. there's some other pictures going online of another gentleman who looks birdied who doesn't look like these gentlemen. i didn't know if there was a sense of exactly which pictures people are following. >> well, i think that, you know, with all of these images and pictures that are out there that are so easy to distribute these days, you have to take it with a grain of salt. the authorities have not released the picture that we know that they're looking at. this individual that they want to try and track down. initially, they're sharing it with other law enforcement agencies, just trying to see if anybody knows this person and there is to doubt a strategy to that. but they don't want to get the information or any pictures out of the public yesterday to perhaps clue this person in on where they're at in the investigation. so we can't independently verify any of those other pictures that are floating out there and i can tell you that the authorities have not officially released any pictures. >> has there been a sense of frustration from the authorities, scott, because of all of the, you know, head fakes

and misinformation that has gotten out, some of the early stuff that's been out, also because of potential media that's made it easy to make these pictures go around very quickly. >> well, i'm sure there's a great deal of frustration. we've with he got the fbi's statement that came midafternoon yesterday after the false reports of an arrest. that was pretty strongly worded that said that basically admonished the media to vet your information better. that said that the reports of an arrest were erroneous and that this is an early stage in the investigation and that we all have to be careful. and that's important for everyone to pay attention to. >> you know, scott, i don't know what to think of the post at this point, they got so much flack early on, the new york post, but they are fearless and either they figure at this point they have nothing to loose or they've got some pretty darn good -- the pictures that they have here, scott, i could pick that guy out of a lineup after

seeing it here. the face of these two guys are so clear that -- so maybe they haven't released anything. but the post thinks they've got the two guys. and like i said, if you were listening to the post at the beginning of this whole mess, you were totally led astray. so i don't know how much faith you can put in it, but blind pig finds a kernel at some point, right? >> yeah. look, i don't want to pour water on anybody's reporting. they have to answer for on their own issues. >> they got like multiple shots of both of these guys. >> yeah, but then i'm looking online and there's another shot of this other -- i think what's happening is people literally online are trying to do their own investigative work looking at various pictures. >> look, there's a picture here on another site -- >> the post have to be dead wrong if that's the ones they're looking at, then.

>> listen, what it speaks to and as we said yesterday is that wear all on edge and we all want answers and we all want to know what happened here. the fact is that the authorities have done a great deal of work and they've made a tremendous amount of progress in the last couple of days, but any criminal case is hard to make. and spotting people out of so many hundreds of people that were at that finish line and identifying them is not easy, much as it sometimes seems it would be on tv on crime shows. and we're all impatient. it's going to take some time. >> yeah. and then you had yesterday fully people waiting at the courthouse to see the arrested suspect. and some of them said -- the news organization said they had three independent sources for this. it's bizarre. >> and, you know, the other issue going on there, and as we said yesterday, is there's every law enforcement agency that you can imagine working on this and that means there are a lot more

sources and there are some sources that are more careful than others. and some sources are bad sources. but some of the things that were coming out yesterday, as we reported on, you know, the reports were that an arrest was imminent. i've been doing this a long time. i've never heard a law enforcement source, anonymous or otherwise say an arrest was imminent, it didn't add up, or that the person would be brought directly to the courthouse. that doesn't necessarily add up because they typically bring them to the fbi or a police agency to process long before they bring them before the judge. so the message to the public, as it continues to play out, and it will for some weeks is take everything that you heard with a grain of salt. >> i don't see these guys anywhere else. the post is maybe taking another shot, you know, could they be first? they would be early on if these are the two guys that -- either that or -- and at this point, they've been so wrong about other stuff. these, yeah, let's try it. i don't know.

anyway, scott, there's no -- anyway, elsewhere, scott, the arrest has been made in the ricin tainted letter case. a 45-year-old mississippi man was arrested yesterday. that's where the senator was from at his home near the tennessee state line. the arrest comes after a letter sent to president obama tested positive for ricin in a preliminary check yesterday and then another letter with the same deadly poison had been sent to a u.s. senator. >> did you hear he was an elvis impersonator? >> this guy? >> yes. >> i heard that. >> letters sent from right where graceland was. >> that doesn't narrow it down. did you know i was accosted in times square. >> but an elvis impersonator? >> yes, yes. >> yesterday? >> no. but after the elmo -- i've been accosted by elmo.

>> but they show how many different freaks there are down there. i didn't put two and two together. this was two months ago or something. right to my right, i turned and there was this guy on full on elvis regale ya. i started it, i guess. i made some comment that there's so little in your life that -- >> and then what happened? >> he said something back to me about you have so little -- it was a pretty good comeback. hehe was not just a nice elvis impersonator. he was someone there that was object northboundus and was there to earn a living and had been used to insults and stuff like that. >> if you would run into the naked cowboy, what would you have said? >> i'm uncomfortable when i see pictures of him in general. he's got wears on, doesn't he? >> he wears underwear. >> yeah. >> that's the only redeeming quality, i think. >> now there's a woman who calls herself the naked cowgirl would stands around and --

>> you would not about her. >> "new york times," it's in times square. >> where do you think the name times square came tr? >> that building that was on -- >> the "new york times." >> now it's on 40th street, but it used to be in times square. you have to walk through times square. >> i've seen that building. it looks like a prison. you know it does. what are those bars for? >> becky, what's on today's agenda? >> keep people in or out? >> probably both. >> we can talk a little bit about that. we're talking about corporate news. we're going to keep an eye on apple shares today. it dropped below $400 yesterday or the first time in 16 months. the decline came after a chip suppliers forecast led them to start worrying about weakening demand for the iphone and ipad. joining us is gene munster. gene, by the way, also covers google and google will be

reporting after the bell tonight. gene, why don't we start with apple. this has been an incredible run up and then an incredible drop. below $400. is this somewhere you saw the stock going? >> no way. this is -- we thought there was a floor at 450, so this is a lot lower than we thought it was going to go. >> and at this point, now that it has reached 400 at least in the intra day trade, does that worry you that there is still more room to decline or do you think at this point it's stabilized? >> we think there's an opportunity here. the street numbers still need to get reset. we're 10% below the street for the june quarter. i think once these estimates get reset, that's the point where investors are going to start to get interesting. the southside still hasn't taken those nebs down. that's the real challenge here. >> you thought 450 was the bottom at 455 or at -- when did you make that prediction sflp. >> yeah. it was about three weeks ago.

we basically took our numbers down. >> so when it was at 750, you thought the bottom was 700. when it was 7 hup, you thought the bottom was 650 and when it was 650, you thought the bottom was 600 and then -- >> no. it was more like at 700, you know, we didn't -- it was so strong at that point, we weren't talking about bottoms. but you're right, as it went down, we always thought the bottom was a little bit lower. >> and at 700, if you said the bottom is 450, that would be pretty good. >> gene, there are a lot of people who have been looking at this thing saying, it's come down so far, maybe i should be getting into it. to the accident it's an upside, what is it? >> how do we know what the bottom is. >> we don't know what the bottom is. >> there are investors out there who have watched this come down and said maybe i should get into this thing now because there's opportunity.

1234 would you say based on the decline that it's time to buy or whether the fiscal numbers are reset? probably the same thing they do is wait for the numbers. i think every incest haver knows these numbers are coming down. at 450, i think that's a fair point. but i think what essentially is going on right now is that the buy side has expectations that's lower than the sell side. what i've heard, and i've been marking for the last couple of weeks in talking about investors about apple, the buy point seems to be more about numbers getting to a point where they're not going to be -- or at least the sell side is consistent with the buy side. and where those numbers are, the june quarter, we're at 6 million iphones and 31 million. so i think as those numbers get reset, you're going to start to see a shift at how investors look at this. for the summer of 201, the summer of 2014, it gets a lot better. and so i think that the valuation argument is out the window. it's hard to predict where it's going to bottom out.

but what we do know is once the estimates come down, the buy side should be more positive because the numbers have come down. and secondly, the product release scheduled, that's the critical part for getting catalysts and investors back into the stock. >> the ipad mini, there were concerns the demand wasn't as strong as had expected. what are you thinking in terms of the shipments for ipads? >> the ipad mini is probably going to be fine. that's not our concern point. we're al 18 million for the march quarter and we have i think it's 16 million for the june quarter. so that's not the real -- it's 25% of the business. the real key issue, again, is these numbers coming down. what i would point to, also, is if apple gets into the low-end market, there's questions about what happens from growth margin over time? the street goes from 38 do 49. that's a problem. ultimately this lower component will be margin dlurted to the google business.

>> the numbers after the bell, what are you expecting? >> i think what's more important is they'll talked about these enhanced campaigns and positive unit ads. i think investors are more focused on commentary around those two than the actual results tonight. >> gene, thank you for joining us. we will talk to you again soon. >> thank you. when we come back, we're going to roll into the fast lane with ceo jackson. then the view on the american consumer, right after this. >> announcer: before you hit the road, here is your traveler's check. business travel is on the rise. that's according to a just revealed study by big data travel kb sojurn. 57% of all travel during this year's first quarter was business travel. that's up 4% year over year. so what was the most popular bis travel spot? find out next. [ male announcer ] you are a business pro.

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welcome back to "squawk box." we've got some green arrows across the board. dow looks like it would open about 48 points higher, fass dak open 8 points higher and the s&p 500 a little over 4 points. let's talk earnings news. just a moment ago, we got news

on dow component united health. it was helped by strong enrollment growth as well as higher profit margins at its optum pharmacy unit. nokia reporting smaller than expected loss. the revenues fell short. shares there falling sharply on that news this morning. you're seeing that trading up -- up almost -- more than 10% now this morning. and that's the benefit of a roller coaster. auto nation announcing first quarter results. earnings results. that's the exact same thing. earnings or results, take your pick. joining us, the owner and owe, mike jackson. mike, how are you? >> joe, good morning. i'm happy to say we had the first quarter ever. earnings per share of 68 cents,

a 21% increase year over year driven by a 12% improvement in revenue. up to 4.1 billion. and every part of our business improved with customer care up 6%. vehicle sales up 9%. a very satisfying result. also what i liked is some of the bright spots that we see in an otherwise challenged economy. namely, the recovery of housing, particularly in our big housing states of california and florida. this has put an underpinning under consumer confidence and we see the preassumption of home construction, the energy situation in texas is very strong, lead to go an increase in pickup truck sales for us of plus 18%. we also had significant acquisitions in the quarter. in both phoenix and dallas, revenue run rate of 250 million, which when combined with last

quarter is now over 800 million of acquisitions within the last six months and is, finally, and last but not leaf least, we've branded 0% of the company now under the flag of auto nation and the branded markets, even though we walked away from some names that were 80 years old, improved share right out of the box. >> that's what i was thinking, you know, wayne has been trying to get you to do that for a while and you finally listen to him and then you get the best quarter ever. >> yeah, you know, i should always listen to wayne sooner. he can read putts and he can predict business. he's a great partner and a great founder. >> it's good that it's worked out. you know, you do wonder about that because that florida guy you've got is such a -- what's the name, maroon or maroney, such a strong local name, you do pause when you think about -- it's like when woolworth decided to change its named to venader

or whatever it was. you do think about it. but auto nation has to be big enough to work and stabbed on its own now, mike. >> joe, we prepared for this for years. we had the classic question, do you overpromise and underdeliver or are you patient and when the put brand goes up, it really means something in the marketplace and you can really stand behind it? so we took the longer, harder route and it was no doubt in my mind that it was going to succeed. no jcpenney moves at auto nation. >> where are we annually? are you sticking with your forecast? have you upped it? you would noe know better than anyone what -- >> joe, we had the strongest forecast of all the analysts for manufacturers starting year. we said right out of the box it was going to be mid 15 million. others have now revise dollars up to our number. and if i look at the past five, six months, it's averaging 15.3

million and it should build stronger as we go deeper into the year. we are in the early innings of this automotive recovery, both from a vehicle sales point of view and particularly from service and parts and customer care. automotive is definitely a bright spot in this recovery in the united states. >> mike, have you had seen any evidence in recent weeks of weakness that some of the restaurants have talked about or some of the dollar stores or, you know, this thing that has the market worried about another swoon in the ving? has it slowed down at all, number one. and number two, are japanese cars, because of the yen, are you seeing that affect translated into selling more of those at this point already? >> joe, i definitely talk to all my business colleagues and particularly small business. you've heard that the first quarter was tough.

probably payroll tax impacted more than anything else. and small business is -- and big business for that matter is totally the flux with the obama care act and what it all means. and business is looking at part-time, that you've got to keep people under 30 hours. they don't want to employ more than 50 people. and nobody really knows how this thing is going to work. now, as far as the japanese yen, every major manufacturer in the world has made a strategic decision to produce where they sell. no manufacturer can deal with the volatility in exchange rates. and if you look at where the japanese are today compared to 10, 20 years ago, there is no comparison with let's say 80% produced in north america. so the exchange rate has been dramatically reduced as a factor in our business. and at the moment, i don't see any impact.

>> okay, mike, $42. we've been friends a long time. you couldn't tell me at four bucks that that was something i should -- actually, we're not allowed to do it, anyway, but you couldn't have mentioned that back in 2008 or 2007? 2009? >> joe, i wanted to buy as much as i could. my -- >> you didn't call -- i don't remember -- >> 7 trillion -- >> you didn't saying anything to me. >> if we're buying 8 billion of stock at the discount it is today, that should stay something. >> just a little heads up. no, i'm just kidding. >> joe, i'll help you read your putt, but that's about it. >> yeah, thanks. i don't -- you know, i have to hit them where you tell me to hit them. >> he's been telling everybody that this thing is a story for a long time. >> what i'm not talking about is

how much -- >> the question is whether the squawk viewers are paying attention. >> you deserve it, mike. i'm trying to do the math just thinking did -- anyway, mike, thank you. appreciate it. >> see you later. when we come back, we're going to talk banking. stick around. squawk will be right back. sgra back now with today's traveler's check. the most popular business travel spot for the first quarter, atlanta, georgia. followed by philadelphia, washington, d.c., seattle and the big apple. [ penélope ] i found the best cafe in the world.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. if you're just waking up this morning, a horrific story to tell you about. a huge explosion rocking a texas town late yesterday. you're looking at cell phone video of a large fertilizer plant that was on fire .then exploded. police say between 5 and 15 people have been killed, hundreds are injured, many are unaccounted for and z dose of homes and businesses were destroyed. we're going to continue to follow this story and bring us the latest updates throughout the morning. >> in the meantime, let's take a look at the markets this morning. the futures this morning, the first three days of the week were massive swings. you had swings of triple digits for the dow. this morning, the dow is up by about 42 points.

the s&p 500 is up by 3 points. nasdaq is a little higher, as well. in europe at this hour, trading is actively taking place. you're going to see that at least at this point there are some green arrows there, as well. france and germany both rebounding after yesterday's declines. the cac is up by 0.6%. in germany, the dax is up by 0.2%. in asia overnight, you saw the nikkei lost 2%. smaller losses than in japan. oil prices at this point are indicated up by about 1%. but we did touch low levels earlier today. this is a rebound from what we've been seeing overnight. the lowest brent crude traded earlier today was 96.75. that's the lowest level since july 2nd of 2012. you are seeing a turn and it's showing up in the gold market, too. in the meantime, let's check out the ten-year note. they were going to get some interesting numbers coming out on jobless claims.

those are numbers that will be watched closely. ahead of that number, the yield on the ten-year, 1.7%. the dollar this morning is indicated up against the yen, but it's down against the euro, which is trading at 1.3056. the yen is at 98.29. and gold prices, again, a huge reversal here, as well. they're up by about $10 right now. at the low this morning, they were trading down at 1335. you had a drop of about $65 at the low. now it's up by $10. these are moves that just happened in the last 45 minutes or so where you saw a big swing in both gold prices turning around from losses earlier and oil prices, as well. >> we've got a conversation to have about banks in washington right now. ceo of the nation's largest banks recently sat down by president obama. the meeting was arranged by our next guest, rob nichols. thank you for coming in this morning. >> thank you for having me. >> you did set it up. i don't know how open you can be on this. b

but, you know, before the last election, wall street ceos go to washington and have a meeting with the president. they come back and they would whisper, he doesn't get us, he doesn't like us, this is miserable, this is awful. has anything changed meaningfully in terms of the relationship and the way you think the president and wall street are approaching each other? >> i'll speak for our side. i can't speak for the president of the united states. but i would say this last meeting we had with the president a few days ago was constructive. the members of the financial service this morning made it very clear that we want to play a role in 3406g the economy forward and having a set of conditions in our capital market that would add to lending. and putting people back to work. >> how about in the way he's approaching it, meaning people would come back and say, andrew, it's lip service is. very happy to walk into the white house, but great, a big nothing. >> i would say there has been a lot more outreach on the part of this administration towards the business community in general and the financial sector.

and we've been subject to much of that at the financial services forum. but, again, we want a two-way dialogue, not just with the administration, but to the leadership in congress. to get a set of financial and economic conditions to move out of this fragile economic recovery, to put people back to work and get economic growth moving forward. >> let's talk about the other talking point or debate in washington right now, which is still the too big to fail issue. we talk about it around this table a lot. in particular, this legislation which is proposed, the sherrod brown legislation. your view is this is comical. >> i would say this. it's important that we have a set of regulatory rules over the financial sector that makes it safe, secure and sound and allows these institutions to do what they need to do to lend and provide credit availability. >> do you think they can fail right now? if jpmorgan were to run into trouble or wells fargo or a big bank were to run into trouble,

something out of nowhere happens, what would happen? >> there is a procedural framework now to take down these large institutions and you -- >> and you believe -- and that's our goal so to make sure that no institution is too big to fail and taxpayer money is never used again in a failure, ever. >> do you believe that the dodd-frank framework would really, a, work, and b, politically, do you believe the politicians wouldn't say, oh, my goodness, so-and-so is going down, we're not sure because we never used this framework before, we actually should pump the money into it? >> there is total bailout fatigue in terms of putting money into any sort of financial institution, there is to -- >> but not if the entire financial system is under stress. that's what happened the last time around. it wasn't that we were saving one bank or one place. this was the entire financial institution. you started looking at the dominos collapse. >> absolutely. >> i don't know if dodd frank would protect us from something like that. >> so the regulators are working on it.

there's some key issues here. one is the issue of international harmonization. getting the other jurisdictions to go along with the united states so that we can have some international harmony there. then there's the issue of capacity. the fdic is gearing up and building a team of people who could actually do this. the idea that the fed would come in and -- >> do you think the banks are too big? >> i do not think that the banks are too big. i think in the u.s. with the -- we have the best capital markets, i think we need to make sure it fosters an environment where we can have small, medium and large banks, where we can have community banks that thrive, regional banks that tlooip thrive and large global banks. incidentally, andrew, if you look at the largest 50 banks, only about a half dozen are u.s. banks and incidentally, of the top 20 or 25 banks, our largest is number ten.

so in terms of the size of our banks vis-a-vis our overall economy, much smaller than our international fears. >> but what about the idea that it's not just the banks. it's the financial companies, the insurance companies -- >> in addition to banks, we do have insurance companies in the financial services forum. >> there have been a lot of questions raised about all the regulations that were dropped on the banks when some of these other companies, like aig, for example, they were a huge problem and they're not going to be regulated in quite the same way. there's talk about cracking down on the insurer, as well. >> in the case of the nonbank, the group that was created under dodd-frank, the fsoc, is looking to designate a number of these institutions as nonbank systemically important institutions and are working on coming up with a set of supervisory criteria to oversee them, as well.

>> why do you think ta most big banks these days trade under book value? do you think it's really that investors don't believe the numbers? >> it's hard for me to speak to. it's hard for me to speak to investors, so i certainly don't want to -- i don't want to speculate there. >> but you have virtually everybody across the board under book value that says something about something. this new bank in washington, when you're talking about the large institutions, about this unfair borrowing advantage. i guess i have two observations there. one observation is some of these studies have suggested there is an unfair borrowing advantage for years well before the crisis. i think that's stale and i think it's not sensible to use data from five or six years ago to talk about to date.

secondly, there is rigorous debate that suggests that because these institutions are large and they're subject to more oversight and supervision and regulation and there have been all of these changes to make them more safe and sound and security and because they're diversified, they're able to borrow less expensively because many view them as safer, not because the feds are going to come in and do some short of backstop, and that's a point that's been underlooked at in the policy debate. >> before we go, tell everybody what that pin is that you're wearing. >> i'm an adviser to the red cross and the tragedy outside waco and in boston underscore the importance of giving blood. give blood. our nation's blood supply is at a low. i talked to boston last night. supplies are fine. but in texas, check in with your local red cross. >> i didn't realize that it has a shelf life of about five days.

>> it has a short shelf supply. one american needs blood -- there's somebody in need of blood in the united states every other second. >> rob, thank you for coming in. that's a message everyone can agree with and we appreciate it. thanks. when we come back, we're going to be asking the question whether u.s. companies are thinking about pulling manufacturing operations out of china. phil lebeau joins us from shanghai with that story. first, though, check out nokia. the company reporting a smaller than expected loss. revenue did fall a little short, and shares are down sharply on this news. it's a decline of 12.5%. squawk will be right back. ♪

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welcome back. on our agenda today, we have a number of reports and key economic release. morgan stanley and pepsi are set to report before the bell. after the bell, we'll hear from ibm, microsoft, amd and capital o one. at 10:00, we'll get the philly fed survey and leading economic indicators. the polled forecasters say filings for first time unemployment benefits likely rose by 4,000 in the latest week to 450,000. we've been watching the equity futures this morning and -- what did i say? >> 450. >> no. i thought it said 350, didn't it? whatever. 350,000 is the right number. maybe i read it wrong. rose four to 350,000. >> yeah. >> what was in the prompter was right. if i said it wrong, it was me.

>> your jumble record lately is -- >> that dooms you. go ahead. trash talk a little bit more. >> yeah. still i got some breathing room, given the last 12 or 14 evens. >> oh, boy, oh, boy. u.s. equity futures are indicated higher this morning. dow futures up by about 47 points. s&p futures up 4 points and we'll see what happens as we get closer to the opening bell. >> joe, keep your eyes on me as i read this. >> that's all i have time to do if i tried to watch you, andrew. >> it's complicated. all the names reporting after the bell yesterday, ebay's first quarter earnings beating the street by a penny. but the company's current quarter guidance, shares falling on that news. you can see the stock there off about 3%. scandisk first quarter earnings beating the secret, as well. the company is raising its revenue forecast for the year saying it's expected higher prices for its chips used in smartphones and tablet peps.

and earnings at american express topping consensus, but revenues fell short there as card members' spending growth remained muted. >> a new study says china is quickly losing its luster for a base for manufacturers looking for a location to build things. it's going to have to pay people more. does this mean u.s. companies will think twice about moving operations? phil lebeau, you're going to have to take our word for this, is in shanghai. we've got a little fwlich. actually, he's -- i thought i saw him here today. maybe not. but pretend he's in shanghai and he joins us on the squawk news line. we have a very attractive picture of you to show you while you're talking, phil. >> joe, i can assure you that i'm in shanghai. i sat through traffic. this study that came out is rm releeling in terms of what's changing in the world of manufacturing. look at how the cost of manufacturing in china has continued to move up steadily

since 2008. what you want to look at there is at the far right-hand side, you'll see manufacturing costs, according to partners, will be equal for manufacturing in china versus the united states by 2015. here is one of the reasons why. take a look at the china currency, the rnb. it has been appreciating at a steady clip. in fact, it's up about 25% to 30% over the last ten years. an industry out of suburban chicago, they've noticed that increase in costs not only because of the rnb but also because of wage inflation. it's increasing about 12% annually here in china and that's why the ceo is saying we knew costs would go up, but not that it was going to go up this fast. >> well, it's something that we anticipated when we went to china. we just didn't know how quick it would happen. it really comes down to where the product is going to be sold. if the product is going to be

sold in china, it makes sense for our customers, especially u.s. customers, to get that product at a local manufacturing zone. >> but does it make sense to manufacture here if you're going to ship that to the united states? united states. look at the hourly rate inflation china has experienced the last seven to eight years. those who have been studying manufacturing in the country believe the advantage that china has held for the last 15, 20 years, that's quickly evaporating. >> the chinese manufacturing cost advantage rose dramatically in the last few years. if you go back to 2005, it was pretty common for landed costs for china to be 25%, 30% less than the cost of manufacturing in the united states. based on our knoll sis, two-thirds of that gap has been

closed. >> so here's the question, guys, how much will this ultimately help manufacturing bring jobs back to the united states? most agree we're not going to see a mass exodus. china is too large of a market. what you will see, however, in china -- (inaudible). those jobs will ultimately shift to the united states. it won't be huge. >> all right. phil, we're getting about every third word. so we're going to -- i want you to e-mail me something if you can find out. what are the absolute levels -- don't tell me. e-mail me the absolute levels of what we're talking about. >> the other question is not only the absolute levels but my guess is we're looking at china as a whole. but you were yesterday talking

about the brand-new ford plant. maybe labor costs are lower. >> you see three and a half times. >> by 2015 it would be in parody with the united states. >> i'm sure it's not dollars per hour. with all the increases what's the average per hour wage. >> phil, if you hear us, e-mail that. >> can you hear us, phil? is he gone? he's already gone. e-mail us. they're trying to get minimum wage up to what, here? $12, $13. what is it here? >> it is state by state. >> but there's a federal -- obama proposed. >> $9. >> i think it was $9. >> but i think right now it's $9 or something, $9.50. >> i wonder what we're up to with china. >> maybe "squawk" viewers will e-mail or tweet us. still to come this morning, the

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this morning we have more news on that deadly explosion at a fertilizer plant in texas. there is still a lot of

confusion there. the latest when "squawk box" returns. revolutionizing an industry can be a tough act to follow,

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pepsi is out. core earnings per share, 77 cents. the expectation was 71 cents. revenue, 12.58 billion versus expectations of 12.53 billion. the company is excited about some of these metrics. like 4.4% organic revenue growth. that's not including acquisition ises or other things. 4.4% in developed as well as emerging markets in both the beverage and the snack business. the company is also highlighting the americas as far as foods. organic up 6%. i don't think they mean organic food.

>> organic revenue, real growth, no currency fluctuations. >> i think to melees potato chips are organic. to me they are. and amea up 15%. china very strong. organic line in china. 17% in beverages. and finally they have seen the light with salty snacks. 47% increase in china in salty snacks. we'll have those people fat in no time. we'll get them on board for all the problems we have here. in 2013 guns was right in line with the company's long-term targets. >> it's interesting because they beat by six cents. you have to wonder what that was for the year. >> coke was good too. they don't have the peanut butter and jelly synergy of

salty snack with beverages. we are going to be -- what does snipe mean? >> that little thing that rolls across the bottom. >> where? >> oh, it's not working. there's the snipe. i thought it was a small little animal. >> it means you get the quick picture like we just saw of hugh johnson. it's interesting because he's going to be on. >> he will be good. so they have to tell me they're going to run a snipe. >> no. you're not supposed to read the parts in white. those are production cues. >> hugh johnson will be joining us in just a few minutes. cfo of pepsi. >> there it says texas explosion. we're going to talk about that story. then it says andrew. firefighters battling a blaze at a fertilizer plant in a small texas town when it suddenly exploded.

dozens feared dead. many people, including first responders, are unaccounted for. dozens of homes destroyed. david scott reports from texas this morning. >> submitted to nbc affiliate kxas shows the fireball, the blast ripping through the fertilizer plant in texas. >> firefighters were already on the scene as well as ems when the explosion occurred. >> i have no idea how many ems people may be hurt. >> a blast so strong many thought it was an earthquake. >> massive. just like iraq. just like the murray building in oklahoma city. same kind of hydrous exploded. so you can imagine what kind of damage we're looking at that. >> 75 buildings, including homes, a middle school, and nursing home damaged or destroyed. >> we are going house to house, business to business, and we're seeing quite a bit of devastation in that area. >> we've got a lot of people

still trapped in houses. but that's dangerous materials. it is hazardous material. we can't get to them. >> a triage center was established at a local high school but evacuated for fear of a second explosion. >> right now we have a tremendous amount of injuries. probably over 100 injuries at this time. at this time. >> fires by the blast burned into the morning. preventing emergency workers from searching the rubble. david scott, nbc news, west texas. we're going to continue to follow this story this morning and bring you live updates throughout the broadcast. also let's get to scott cohen in boston. the latest into the marathon bombing. scott? good morning, becky. we have moved over now to boylston street, past the finish line of the boston marathon, to give you a different vantage point. the finish line would have been

down there, the site of the tragic events of monday afternoon. and not far from here at the church of the holy cross, people are already lining up for an inter faith memorial service entitled "healing our city". it begins 11:00 eastern time. president obama, governor deval patrick, mayor menino, the boston children's chorus and yo yo ma. one sign that i saw said boston doesn't blink. training for 2014 begins now. so this city is determined to bounce back. juxta pose all of that with the hard work of the investigation and some of the grisly aftermath of the bombing, the fragments of the bomb by the investigators including potentially the zipper

pull from the backpack you see in one of the photos. the shrapnel that was used to inflict so much damage, the pressure cooker. at least one of the bombs. you know, this is important evidence as they try and uncover all of this and what happened. perhaps equally important no, shortage of images. one obtained by whdh shows a bag that may have been the bag with the bomb. another picture that's not being released that may come from one of the various surveillance cameras appears to show a six foot tall man in an off or off white baseball cap. that is something authorities want to talk to, could be a potential suspect. law enforcement officials telling nbc news this person is seen in the video putting a bag down near the site of the second

blast. no question they certainly want to talk to him. a day of reflection. but investigations intensifying. back to you. >> we know you'll be watching this all throughout the morning and throughout the day. we'll be back several times throughout the program. scott cohn is standing by in boston. we have been trying to keep an eye on what's happening in the markets. pepsico came in with better than expected numbers. revenue also better than expected. and joining us right now is hugh johnston, chief financial officer at pepsico. hugh, thank you for being with us this morning. >> thank you, becky. good morning. certainly a tough week in the news. >> it is a tough week in the news. we're trying to do our best to watch other things that are coming along as well. our thoughts with everyone in boston and waco. we saw your numbers this morning. they were impressive, hugh. strong numbers pretty much across the board about from every sector.

>> yeah, we really did get off to a strong start to the year. if you look at the 12%, solid bead of six cents, we feel good about that. driven by developed markets such as america foods business. grew 15%, led by china. we feel good about that. we feel good about the margin improvement. up 80 basis points. a solid improvement on margins year over year. what it reflects is a lot of work over the last four or five years, putting the portfolio in a good place. where it's products all the way through to good for you. beverages as well as foods. we really do feel good about the performance in the first quarter. it's a solid start to the year. that's why we reaffirmed the full year. >> you beat by six cents for this quarter.

does that mean you expect trouble for the rest of the year or potential trouble. >> no, no. i certainly wouldn't say that at all. obviously we operate in a volatile world. and the beat we feel good about for the quarter, a little bit of that was tax. but we're watchful as to what's happening. investing it back in the business. >> raised your margin by 80 basis points. did costs drop somewhere? >> it's actually a little bit of the price versus commodity relationship. but it also goes back to the three-year, $3 billion we put in place last year and we're yielding the benefits of right now. the company is acutely focused

on productivity as a means of improving margin improvement. what you really have is say management team laser focused on value creation. >> hugh, there's been a couple of reports the past couple weeks about the possibility that pepsi could or should merge frito lay with the old kraft. what do you think of that idea? >> yeah, sure. obviously press speculation and things like that, hypotheticals. we don't tend to comment on that. we don't comment on individual potential transactions. broadly we have talked about m&a. i'm not sure i have much more to add in terms of large scale m&a. >> nelson peltz now a shareholder of pepsi. have you had conversations with him? >> yeah, the same.

i think you're referring to some of the things that have been speculated on in the press. you will understand why i don't want to comment on things like pepsico investors. >> got to try. >> hugh, let's talk about china. you pointed out the numbers were strong. kind of jumping off the page is 47% gains in snacks. how did you get 47% increase in snacks? was that getting into more markets. >> it's interesting, becky. we have a great portfolio ranging anywhere from lays potato chip products to the quaker business. we have a local breakfast that we have made more convenient. frankly, as we build those businesses and roll them out, they're very popular and successful in china. >> but you're talking about a rollout in other markets. new markets where you hadn't been before? >> no, no. we're slowly but surely expand anything china. frankly, where we have been

before the velocity is also improving. >> hugh, can you do me a favor. i do this occasionally. it's about me. can you make a snack that has no carbs? can you make it not like a pork skin product. something that's not quite as disgusting as eating dried pork skin. any snack that will satisfy my cravings for carbs but would be protein? do you have anything? >> i have one that i think would be great for you. we have a naked juice. it's chocolate and banana. tastes fantastic. 30 grams of protein in a bottle. i think it's made actually just for you. >> i can't crunch on that. hugh, how many calories are in that bottle? the bottle says two servings but it's really one serving. once you have the bottle you want to drink the whole thing. >> to tell you the truth i use the product all the time.

and i do drink it as two servings. when you're looking for protein you are going to look for calories. but they're good calories. >> i need something that i reach into a bag and crunch on that are not pork rinds or carbs. talk to indra. you know how the bubbles explode in her mouth? she loves that. i need that with snacks. >> we will work on one. >> you've got everything. give it some thought. thank you. >> okay. thank you. >> up next, snipe hunts are very real. and some are snipes. i'm going to talk about that when we send andrew on a snipe hunt. repair kit for pizza. is this a temporary blip or is the rally over? we asked that for the last 24. we will get a market out after the break.

morgan stanley indicated with a nice gain after the company just moments ago reported results. and they gave us five to choose from, which is always nice when they do that. >> multiple choice.

>> 61 cents. it's 49 cents, including items. 50 cents from continuing operation. 61 on an adjusted basis. i believe that's the one we will use against the estimate of 57 cents a share for morgan. the revenue estimate was 8.35 billion. 8.35 institutional securities 4.1 billion. there was the first quarter included negative revenue. it was much better a year ago when it was $2 billion in the year ago period. the company says that -- gorman said they demonstrated solid momentum across the firm, firm

wide this quarter. >> they point out global management. that's what they talk about near the top. 3.5 billion. pretax margin 17%. >> compared to 3.3 a year ago. >> when james gorman came on on the show a couple months ago and talked about trying to get that up to 10%. and that's still a little bit of a hill to climb. >> andrew, the combination. >> where is it? >> it's not in there. but i don't believe that they've gotten there yet. >> if it goes down it's good, right? >> 4.2 versus 4.4. i'm just saying, they're doing the right thing. >> hopefully paying people less, generating less revenue for the federal government. so it's good. 4.2 instead of 4.4 billion in a year ago period. everybody thinks that's good. >> what? >> good for new york. less good wine.

>> why would that be good for new york? >> i don't know. that's always my question to you. volatility in the market. keeping investors on edge. managing director in jersey city. guest host business insider, ceo and editor-in-chief. most of it was monday, peter. we lost 2.60, up 1.60. we're really down from the recent highs where we've gone up about 2,000 points or more on the dow in the last six months or so. and yet we certainly run a lot of segments about is this the top or is this the rally's last gasp. as long as we keep running those it's going to keep going. >> in the longer term it is still intact. we are still in correction mode.

>> what's the correction that you're going the see? correction is 10%. so if we're in correction mode, then we need to go down 1500 points. >> okay. from the recent highs in the s&p 500, which was close to 1600, it's very conceivable we get to 1500 in the near term on the s&p 500. >> that's not 10%. >> i'm saying mode. i'm not saying we're in a correction. it's correction mode. mode meaning -- >> mode is different than correction? >> it's a temp rarely pull back. >> okay, temporary pullback. s&p 500, 1500, very, very reasonable. >> you're not expecting a correction of 10%? >> not yet. i would have to see a lot more. clearly we have seen the near term top. a quarter with a lot of volatility. concerns over china's growth,

earnings. i suspect we will see more down side momentum. we could see 1500 on the s&p 500. and i think there's a lot to be concerned about. that said, i do think we continue to see very, very strong broader themes for the market to move higher. whether it's housing, gdp over the next two or three. there's a lot of positive going o. but we are stepping into a period of tremendous volatility. >> peter, the high is not 1600. >> just shy of 1600. >> 1570. >> yeah. >> today we're at 15.52. >> yes. >> all right. so definitely in correction mode. >> here's my question for peter. peter, talk about the long-term rally being attacked.

what about profit margins? they're already at record highs. any time we have hit a level close to this, you have a major crash. nobody ever sees it coming. are you comfortable profit margins will continue to increase? >> i think they will hold their ground. they will continue to see very, very nice profits depending on the sector. the s&p yesterday, for example, the four largest components of the tphas kabg all take a major, major hit. and concerns over large cap tech products. that's a sector that will continue to see weakness. profit large ins should continue to be quite health y. i do suspect, again, the broader narrative, the rally remains intact. >> that's 1% we're down now. your forecast is we could be in

correction mode. >> i think the s&p 500 could reach 1500. >> so 70 more points to go down. so 70 divided by 1570. >> correction technically is 10%. correction mode. >> but we're still expecting it to go higher. a lot of leeway. it's going to be hard for me to be wrong. sorry to get so specific for you. . coming up, we'll talk about apple shares off of the investment tree. tumble to their lowest level. we'll talk about whether apple can recover from that freefall. probably some views on that. later, immigration, guns, recent letters and terror attacks in

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still to come, another "squawk box" exclusive. a special interview with one of the fed's most hawkish officials. jeffrey lacquer, president of richmond federal reserve bank. when the fed will start raising rates. an interview you can't afford to miss. it's right here at 8:00 a.m. eastern. "squawk box" on cnbc. profit from it. but i wondered what a i tcustomer thought? is great, hi nia... nice to meet you nia, i'm mike. what do you drive? i have a ford explorer, i love my car. and you're treating it well? yes i am. there are a lot of places you could take your explorer for service, why do you bring it back to the ford dealership? they specifically work on fords. it seems to me like the best care. and it's equal or less money, so it's a value for me. get a free brake inspection and brake pads installed for just 49.95 after rebates when you use the ford service credit card. who doesn't enjoy value?

welcome back to "squawk box", everybody. just about an hour away from weekly reading on initial jobless claims. economists looking for 350,000 new claims. we have been waiting for numbers. joe, you have verizon's right now? >> i do. the headline from the company,

verizon posted strong earningings growth in 2013. 68 cents a share is the number we're going to use versus expectations for 66 cents. stock right now is going to trade higher based on the bid. the revenue number 29.42 billion versus 29.549. that's pretty close on a number that big. here's -- >> it's the key. wireless numbers. >> 677,000 wireless retail post paid net connections. out of a total of 727 net retail connections in the first quarter. they talk about how much is from smartphones. smartphones accounted for more than 61% of the verizon wireless retail post paid customer phone

base. >> average revenue per account. >> yeah. wire line services increased to 107.15. when you think about verizon, it used to have a 4.15% yield. it will go down a little bit. still 4% yielder. >> did you see they reported record high ebitda margin. is that -- hold on. is that just on post paid customer or on everybody? >> i believe that's with verizon wireless. >> that's amazing. >> very high for the industry. >> that's like the toll booth. it is an mazing thing. >> 1.01 for wireless post paid churn up five basis points year over year. >> incredibly low. i mean, just generally.

>> 1%. that's not. take a look quickly at the futures. the dow futures up 61 points. getting a little help from strong earnings numbers. we're continue to go follow the investigation into the boston marathon bombings. authorities at this point are looking for an unidentified were man seen on video dropping off a bag at the site of the bombings. it came from a department store surveillance camera. there was an explosion at a texas fertilizer factory overnight. it killed an unknown amount of people. 5 to 15. injured 160 people, according to the press conference. and small town of west texas. the explosion at the plant can be heard as far as 45 miles away. this was measured on the richter scale at 2.1. police are currently estimating again between 5 and 15 casuals.

this has been a huge disaster site. they are still trying to get through on a house-by-house basis. this set off a huge explosion. there was a fire at the plant ahead of that explosion. the cause hasn't been determined at this point. >> if you have a big old bag and you really do on camera have a dropping off, setting it down and walking away from it, that's a little bit suspicious. let's talk to these two senators. we talk about a lot of things. the purpose of immigration reform is at the forefront on capitol hill. bipartisan gang of eight releasing legislation which will be up for debate. joining us now, senators skwrjo mccain and charles schumer. to come up with a different word for gang. does it feel good to be part of a gang? i don't see you guys that way really? >> well, i'm from brooklyn.

>> maybe it does. gentlemen, while i have you here, this is the the four front on everyone's mind is the investigation in boston. do you know anything that we don't know or "the new york post" doesn't know about these two guys. one of them looks like he drops off a bag. do you know anything we don't know? >> i do not. >> senator mccain? >> all right. let's go to the state of the purpose of this is. you did this late last night. you looked pretty good, senator schumer. have you gotten the answers to all the objections we are going to see? is it amnesty or not amnesty? >> it's not amnesty. when you wait somebody who has been here illegally, to the back of the line. you make them pay a fine, page them pay back taxes, make sure they work.

they have to wait 10 years before they get a green card, i don't think anybody would call that amnesty except for people who are against anything happening here in this country. >> a lot of guys against it are going to say if you don't do border security first it's an invitation to come in here and you're not going to be illegal eventually. senator mccain, is there enough money to that goes towards border security on the front end? >> i think so. it's not the first time i have had the opportunity to work with senator schumer. his word is good. obviously there are gersthey're on exit entry, visas. and there is also everify, in other words, documentation is required for anyone looking for a job that is tamper proof. that and that dries up the

magnet. there will be penalties for employers who knowingly higher someone who is in this country illegally. 40% of the people in this country illegally didn't cross their borders. they came in and overstayed their visas. that's an important part of it. i believe border security has improved, but we still have quite a ways to go. we have provisions in the bill to make sure that happens. >> not to compare this to the gun legislation. but the longer they take it seems they lose momentum. some people are worried if this tkrogs out a long time it's going to have some problems, senator schumer? do we have a problem? >> you see the eight of news a room day in and day out. kwe reach compromise and carefully thought out and some

creative solutions to solve this problem. and we now are on a track where everyone will get a chance to read the bill. everyone will get a chance to make amendments. but we have a pretty quick timetable. the bill was introduced last night or late yesterday morning. we will have two hearings starting tomorrow. we'll then markup the bill. it will -- in early may. and hopefully be on the floor of the senate in late may, early june. so if we can pass it, our goal, john's goal and my goal is to have it with a large bipartisan majority, not just 52 democrats and eight republicans. if we pass it 55, 25, the house could very well move our bill. so we want to move quickly. the kind of support we have seen from both sides of the aisle was always greater. now it's greater than it ever

was on gun issue. >> could i add just one additional point? >> everybody says what's different from 2007 when we failed? i think the attitude of the american people is significantly different. people say? we have a secure boarder and people are here illegally, get in line behind those who came to this country legally. most americans support that. most americans are generous of spirit and understand that 11 million people can't stay in the shadows in this country forever. >> and i want to say without john's leadership we never would have gotten there. he shows tremendous courage and fortitude and has focused on this issue. >> gentlemen, and it -- to speculate is always dangerous. but the media, what are we going to do here? think of the worst-case scenario. if it does turn out this was a

student here in boston on a foreign national with a student visa, something like that happens, could you see that delaying what happened? you would here them immediately say we're moving too fast. we need to make sure we protect our border. >> first of all, it's been a pleasure working with chuck. our bill tightens that up. >> yes. >> we're going to require -- e verify documentation that somebody is here legally but, more importantly, exit as well as entry checking on everybody who enters and leaves this country. so our argument is if that's the case, well, that's an argument for passing our bill because then we will be able to count far more how how many people are in this country illegally. >> do you have the votes -- do you worry about pressure regardless of what's actually in

the bill? >> i think if that happens, people will say do something about this, not stand still. we're going to do something about it. we have already thought about these issues, students who overstay their visas and stay in the country for a long period of time. we thought about improving biometrics to people can't forge their identities. >> senator mccain and senator schumer, gun control, gun reform. your thoughts on what happened yesterday and where we go from here. >> well, let me just say first i regret it. it thought it was mentioned to me a compromise was reasonable. i think we will probably be revisiting this issue sometime in the future. >> yeah. you know, these issues have a way of evolving and ways you don't know. i've been involved in gun control over 20 years, ever

since i was the author of the brady law in the house. through 20 years where you couldn't get anything done, i think that's chasing, just as you see things chasing on immigration, just as you see things changing on tkpaeu rights. you will see the country changing on guns. >> senator, was the president right in blaming the nra and the pressure he brought on republicans and in some cases, democrats as well. >> there are various interest groups that always weigh in on whatever the issue of the day is. of course that's their right. it's part of the constitution. they have a right to petition their government. so blaming somebody, i'm not sure if that's the right. they weighed in heavily, they were successful. and different groups weigh in. >> they were willfully lying.

>> the president was pretty strong. >> didn't sound like your average lobbying. >> well, i don't want to characterize it. with when they said this will lead to a gun registration it's just absolutely false. in the bill that john and i supported, the system of recording you tkpwaoeug a gun that we use for gun shows, internet, the the exact same one we have used since 1999 authorized in the brady law when you go into a gun shop. there wasn't been one cry that that led to registration or might lead to relation. i think they put up an argument. unck they just wanted to oppose anything. that's the view. >> i can't blame any interest

group for votes. >> senator feinstein, maybe if you don't say things like if i could get 351 votes in the senate for an outright bran, that's probably not helpful. >> every senator is able to say whatever they say as far as i'm concerned. people answer to their constituents. i've never been a room monitor. >> i say this on this issue. if you believe in the second amendment, i do. i believe in the heller decision that there is a right to bear arms. you can't, as some of the left, take the first or fourth amendments and read it so expansively and say the second is just for malicious. having said that, the background check bill doesn't interfere with the rights of any law abiding gun owner. it interferes with the rights of those who are in prisons,

mentally ill. >> both sides. i think we have to go. >> let me just also say, and i know you have to go, this is a terribly emotional issue. of course it is. and i think the american people will continue to be engaged in this debate. >> me too. i do too. >> you both mentioned compromise. it's nice to see you on both sides of the fence working with each other. what is the secret to bringing that to washington at large, which has been tremendously frustrate to go watch as a citizen the last five years. >> mutual respect. and having a common goal. it's one thing to have a group of people get together and say we're going to solve all the problems that exist. it's another thing to have, as chuck and i work together to the 51 votes in the senate filibuster reform to this issue and other issues we will be working on in the future. but it has to do with mutual

respect. and chuck and i have disagreed strongly but his word has always been good. >> and it's mutual trust. it's respect. i understand. i didn't have the same views about the border as john mccain did. but he's in arizona. he's right on the border. most people in new york say, why do you have to put more money into the border? i wanted to tell my new york constituents that i saw his problem and we have to meet him part of the way. and vice versa. you have to walk in the other person's shoes a little bit and not think your position is the the only right position. >> appreciate it. i've been racking my brain for something other than gang. >> i hate it too. >> remember that gang of -- how many in china. >> two or three. >> bad people in that gang. . what about a gaggle?

>> how about our gang? >> all right. senators, thank you. >> spanky and alfalfa. showing his age. >> we appreciate it. up next, apple shares falling off the investment tree as they are getting sauced. tumbling to their lowest level. slices over the years. >> do they still have a core? >> i don't know. there's a core value apparently. we're going to talk whether apple shares can recover from the freefall. at the top of the hour, an exclusive interview with richmond federal president lacquer. ♪

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john, how far does it have to go down at this point? >> me? >> that's you. >> tom. >> i apologize. there it is.

>> we have a john fort. sorry, tom. >> the march quarter is going to be a difficult one given a tough comparison of the ipad. the success of the mini. there's near-term pressure when the company reports results. hopefully there's not much more down side from today's level. >> put numbers on it, down side and up side. a number of people have been with apple who think maybe it's cheap. how high can it go at this point if expectations have come down as low as they have. >> i think that's a good number for 12-month appreciation. on the down side, i think you could see as low as $330. >> tom, henry blaggett is here. >> it looks to me as if wall

street thinks apple is going to become nokia. that is certainly a possibility. products are still great. what is it that will actually get the stock to turn around. >> it's motivation. the mistake investors are making, walking into apple and thinking two years from now it will only be the next generations of the products that are there today. the speculation, the television, none of those have to be home runs with the stock trading where it is today for apple to do better. >> tom, look, i'm holding an iphone 5. i'm told the next iphone 5s is going to look basically identical to this. isn't that the ultimate problem, they're not innovating fast enough. even if you think they are? >> to me the ultimate problem is that people are, again, thinking they're not going to make major changes.

who is to say the 5s doesn't have a chip in it. they were slowing to have a 4g device. a lot of opportunities for apple. >> tom for take, thank you for joining us. >> when we come back, jeffrey lacker with richmond fed. ♪ ♪ [ female announcer ] you're the boss of your life.

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the "squawk" reserve. a special extended conversation with richmond fed president jeffrey lacker. breaking economic data. weekly jobless claims now just 30 minutes away. a key read on the nation's labor market as the final hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc. first in business worldwide. richmond fed president jeffrey lacker is standing by in north carolina. he's going to join us along with a man who needs no introduction. you see him there on the left, steve liesman. u.s. equity futures showing some

green. we were down 260 on monday. up 160 tuesday. down about 160 or so yesterday. so really all the damage was done for this week on monday. we'll see what happens from here on out. two major stories in the world outside of business this morning. a large fertilizer plant blew up in a small town in west texas. people are reporting it to be just outside waco, the anniversary coming up. i don't know if it has anything to do with that. >> we don't know that. we started with a fire. we don't know what caused the fire. >> crazy to speculate at this point. in boston, investigators still looking at security video taken before the the two blasts at the marathon finish line. if you were watching cable news yesterday you saw how surreal this can get.

very strange. it seems like good in terms of trying to find out what happened with this. more on both sides -- on both of these stories in a minute. first, becky quick as a roundup of this corporate. becky quick. >> we have a number of earnings out today. first up, look at morgan stanley. 61 cents a share. when you strip out items in that, four cents better. right now the stock is indicated down by almost 2%. it was trading up by more than 2% when the numbers first hit. verizon earnings beat by two cents. a lot of strong metrics. numbers are strong. up over 1.5%.

nokia with a loss. shares down sharply on this news. last tick down 9%. it was worse early this morning. pepsi came out with earnings better than expected. revenue beat slightly too. the company cfo was on "squawk" a little bit earlier this morning. >> really i think what it reflects is a lot of work we have done the last four or five years, putting the portfolio in a new place. whether geographies, products all the way through to good for you. beverages as well as foods and capabilities to operate in this two-speed world. we do feel good about the performance in the first quarter. it's a solid start to the year. >> johnson was talking about why he believes the margins from improved by 80 basis points. he was pointing out in the beginning of his answer. shares up 53 cents.

79.38. let's get to some of the tragic shoers of the morning. joe was saying a blast at a texas fertilizer plant killed as many as 15 people. more than 160 people are injured. toxic fumes forced the evacuation of the community. holding a news conference this morning. >> at this point they are still in the search and rescue phase. and they are currently going from door to door, house to house, business to business, still looking for wounded and injured people that have not been able to get out because of their injuries. now to boston and the latest on the investigation there. cnbc senior correspondent joins us. scott cohn joins us live from boston. >> good morning, andrew. i'm in the middle of boylston,

the attacks of monday afternoon. this third day after the bombings is a day of tragedy, a day of remembrance, i should say, as the investigation continues in boston south end at the cathedral of the holy cross. they lined up before dawn for an interfaith service. it is called healing our city. speakers will include president obama, governor deval patrick, mayor menino, the boston children's chorus and yo yo ma. flowers, candles, american flags. marathon jerseys and the phrase everywhere "boston strong." with all this going on the investigation is not slowing down. as we have been reporting the last couple of days, no shortage

from around the finish line, including the surveillance on the lord and taylor across from the site of the second blast where it is believed they captured at least one image, one of perhaps several images of a man believed to be six feet tall wear a white or off white baseball cap. it may or may not have contained the second bomb. and there are other images as well from our nbc affiliate whgh. they obtained a official of what looks to be a bag at the site of the secretary explosion. there is video presumably of this individual we're talking about who could be a potential suspect. authorities have not released it yet, other than releasing it among law enforcement to find this person, bring it in for questioning and see if they can get to the bottom of this.

guys? >> that's scott cohn in boston. we will continue to track the story for us. right now let's get to the news maker of the hour. jeffrey lacker. steve in north carolina today. steve, good morning. >> hey, good morning, becky. here with jeff lacker in charlotte at the symposium where i attended seven years ago, president lacker and i got news how serious the crisis was. >> we learned a lot at that conference. it was great bringing policy practitioners, industry practitioners together to talk about issues related to credit markets. they were certainly at the center of things in '07 and 08. there's been some recent feeling like we've been here before. how much are you concerned about the recent jobs report. do you know what the number is going to be yet?

>> no, i don't. >> how much concern do you have for the economy? >> i've said for a year or more this looks like a low trend of about 2%. it still looks consistent with that. we have numbers that were positive, unexpectedly good, especially for consumer spending in the first couple of months. that seems to soften a little bit at the end of the quarter. still it looks like 2%. we are going to see swings around that. the longer we go around this trend the more it looks like the trend is 2% now. >> which is a dramatic decline. would you say potential of the economy's 2%? >> i'm thinking we're at about potential right now. first if you draw a line through history the potential is way, way above here. at the beginning of the expansion people expected us to go back to that previous trend line. but instead, we're forming a new

trend line that's down below that and parallel. the growth rate is a little lower. labor force participation has tailed off significantly. it's hard at this point to define how much is sick cal and how much is broader trend. i think the longer we go since the recession the less likely the low rate of labor force participation represents -- >> it sounds like you're talking about lower potential growth rates. you must also think the potential is for unemployment is also higher in terms of where the steady state is. >> so it's hard to say where unemployment is going to go. that decision in or out of the labor force is affected by a whole bunch of things. things such as disability insurance, unemployment insurance and benefits and the like. labor markets are struggling. we have skills challenges. but i think there's a broader challenges having to do with just the climate for investment here that are slowing things down. >> do you have in your mind a

trajectory towards the 6.5% goal. >> barring substantial unforeseen shocks i think we will get there over time. >> i would hope so. can you be a little more specific in terms of when we get there. when do you see unemployment at the end of this year. >> i think it will be in the low sevens. below seven at the end of next year. >> now, you have dissented against the current qe program last year, right? so would you still be a person who says you know what, tas we get lower i'm even more opposed to it now? >> i wouldn't have gone down this set purchase path. i'm in the camp of we have to taper and stop right now if it was up to me. >> where do we stop right now? just top it? >> you have to prepare markets. yeah. if it was up to me. if you made me dictator, that's what i would do. going forward, it's a matter of balance.

i think that the farther we go, the deeper we go with asset purchases the trickier we're going to make the exit process. that to me is the largest cost of what we're doing. >> one of the things you've consistently been concerned about is inflation but it hasn't materialized. >> it's been great. >> are you surprised the fed has increased the balance sheet as much as it has and you haven't seen the inflation? does it change your ideas how monetary policy and the economy work. >> i've been impressed by this stability of expectations. people are pretty confident we're not going to let it get away from 2%. i like that. given what we did with the balance sheet, it spooked a lot of people in 2009. 2010 and 11 we got a lot of flack about that. i was worried it would translate into fear of higher inflation.

i think we're in good place now. we shouldn't be complacent. the turn where you stop supplying more ease and you start having to withdraw monetary stimulus is always the time where it gets tricky and where inflation can get away from you. i always do this. 2004 where we started pulling out stimulus, we're a little behind the curve. four years of 3% inflation. >> you talked about the first year of recovery being the danger. now we're in the third. have you just been wrong about it? >> no. it's the time where it turns. as recoveriys take longer it's deeper into the expansion that you turn and need to pull back monetary stimulus. it wasn't until early '94. the first part of this millenia. it's that point where you know you have to do that. how do you do it? pace and timing of that exit is

going to be the key. that's going to be the crucial factor. we're going to start small. we're going to start easy. i guarantee it. we will err on the side of smaller tense rather than larger steps. >> when is the tapering going to start? >> i don't know. it depends on the data. steve, you know that. >> i've got fuzzy instructions. do you want me to throw back to andrew? >> we're going to slip in a break. >> much more from richmond fed president jeffrey lacker. first, as we head to break, check out the "squawk box" market indicator. green arrows across the board. tdd#: 1-800-345-2550 when i'm trading, i'm so into it,

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welcome back, everybody. let's get back to our news maker of the hour. jeffrey lacker standing by with steve liesman. you started to talk in the last block if you were made dictator you would end this, end qe3. i wonder if you get the sense that opinion is gaining more traction among the other fed members. >> i don't want to speak for my

fellow members. there was robust discussion at the last meeting. i think the minutes did a faithful job of conveying the diverse views. and i think the sense you got of that as part of the center of gravity was pretty accurate as well. coverage spot on. they are different views. but an active discussion whether tapering makes sense or whether we want to go through the end of the year. >> there was definitely a more vigorous conversation. >> absolutely. >> you're saying our take was definitely that case too? >> uh-huh, yeah. and i think the broad coverage, the broad focus on those passages i think was right. >> you've got cover. i mean, if you voted against doing it, i don't think we need to run a headline that you would like to taper now. if you didn't want to do it back then you would probably stop doing it right now.

chronologically i see that, right? >> yeah. >> here's what gets me. i'm not sure what you said about whether it is sick cal or not with the participation rate. i can't tell whether you're saying all the baby boomers are getting old and leaving the workforce so we can't do anything about it or whether you're saying it's self inflicted in terms of all these people that are on disability now and nevercomingback. is it out of our control to control the participation rate? because if we're stuck at 2%, that's really bad. it ruins things for our future. we need to get it back up. >> so participation rate reflects a lot of divorce choices. what i was trying to say is the

farther you go from recession the less likely it is that it's just a purely sick cal phenomenal. it's deeper and going to be a longer lasting trend. a pointed to a couple policy factors, unemployment benefits that are tailing off, getting less dangerous. disability is sort of a longer run trend. that's probably taking a quantitatively bite out of force. maybe not skwraoeu began advertise but some bite out of participation. and i think, you know, dividing the preferences of america's household, about the decision about whether to work is a hard thing to do. i don't think it's just baby boomers. i think you see this in 20-year-olds spending more time getting education, spending less time in the labor force. people in the 40s, 30s and 40s participation off as well.

i think there's broader run trends going on here as well. >> mr. lacker i'm hoping to weigh on on one of the controversy. on the sherrod brown proposal to raise capital requirements, what's your view? >> well, as a regularity you have to like raising capital. the question is, how far do you need to go? i don't think it can reduce the probability of financial distress at one of these institutions, insolvency to zero. we shouldn't act as if it does. at the end of the day you have to make preparations for what happens if. despite all the capital you have before. what if you get to a situation where they're insolvent. i think living wills is important. a little noticed feature. it's not commented much on dodd/frank. it's 165d i think is the section number. it requires them to submit

resolution plans. and the plans have to be credible. they have to take them through support and they get to decide whether they're credible or not. we can force structural changes on them. it's the same issue i have with these ideas about breaking up the bank. i'm open to the idea that that's what we need to do in too big to fail. i ask the question, how do you know how small to make them? i think living wills work is the only way to document to give policymakers and market participants confidence that you can take them through bankruptcy without government assistance. >> do you think the banks are trading right now as if that subsidy is still there, as if the government will come in and bail out the banks? >> i think the expectation is still widespread, that creditors would get government support. and it's part of title 2.

the fdic has the capacity to do that. >> joe? >> thanks, steve. we know the unemployment rate is still too high. and you've acknowledged how great inflation news is. so if you do have a dual mandate and inflation is under control, you should be trying to do something with unemployment since it's a dual mandate. so are you saying that qe has not helped bring down any of the improvement we have seen in the unemployment rate in your view has not been done to qe? >> i think a reasonable case can be made that the path of unemployment wasn't affected much by quantitative easing we have seen the last couple of years. i have to admit to uncertainty. it could be the the case that it is otherwise lower than it would be. the evidence is very indirect and sketchy on this point. if you look at qe and the mechanics of how it works, there's a good reason to

question whether it's extremely efficacious or not. >> which makes me think that since -- if it might be working and you don't know whether it is working, as long as it's not doing any harm you might as well do it. that begs the question you must think it's doing harm. otherwise, you would just do it if you can't say what's causing the unemployment rate to come down. why not do it if you're not doing any harm? >> well, the costs that i'm looking at are the size of the balance sheet does to commit. i think the larger we make the size of total bank reserves in the banking system, the more sensitive things become to small errors in timing and pace of our exit. i think it's going to be easier to get in trouble. you will have more tender on the ground as it were to allow monetary inflation before we're able to react rapidly enough.

>> president lacker, thank you very much. we'll be checking in with you throughout the day. when we come back, breaking economic news. cafe in the worl. nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire. ♪ nespresso. what else? ♪ (announcer) at scottrade, our cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me.

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welcome back to "squawk". jim is standing by at the cme in chicago. you've got the numbers. >> the numbers 352. and the claims number 368 on the continuing claims. it's about kind of where it is. the revision from last week up 2,000. so it's right kind of as expected. this was the big number. independent of last week's claims numbers over of last three weeks claims have been a big deal. they have indicated some sort of spring swoon. this is an indication how severe it is going to be. from the looks, it's not that big a deal. stock market up from that. these numbers came out as expected, which is not bad compared to two weeks ago. >> thank you for that.

we've got reaction from steve liesman. are the numbers as positive as jim was portraying them? >> it's interesting, andrew. we have yet to see confirmation of that weak jobs report come up in the jobless claims. we have a speak up, some of it. now it has settled down back into that 350,000 range. you would think if it deteriorated as much as it has you would see some deterioration. we haven't seen it yet. and i haven't seen the other numbers in the subcomponents in terms of jobs. i don't want to go out on a limb and say they will revise up that march number. but so far no confirmation of the weakness. and some of the other economic numbers are doing okay. you know, steady as she goes, i guess. what lacker said, 2% economy seems about on track here.

>> a big worry obviously is the sequester continue to go squeeze as we go. >> and do you believe it? does that mean the white house overstated the case? are we all agreeing. >> we can all agree it was not the way it should have been done. we would hope the government would come together to do that. >> but there was a lot of breathless conversation at the time. did you report on some of that? >> it was not the smart way to do it. i don't think it had to be done. the deficit is coming down. >> i want to get your opinion on one other subject, which is this debate going on the last day on your world of economists and whether the original survey or study was accurate. do you have a view on that, mr. liesman. >> i think i did the first interview with row goff at this

conference four, five, six years ago when he first came out with the paper. i always thought the 90% threshold concept was bunk. and i'll tell you why. >> just explain to the viewers what the threshold was. >> this was a threshold above which their paper suggested that you would have lower potential growth. and the controversy is that some guys went back and looked at their spreadsheet and found they didn't do the right formulas in the spreadsheet. so the number is actually positi positive, not negative. the debt capacity of greece and averaging it with the debt capacity of the united states, and coming up with a single number that applies to the united states, to me that was bunk to begin with. it takes time after a financial crisis to come back. that's empirical. it's in the data. every time we have a big

financial blowup, it takes time. they showed data on that. >> steve, do you need a study? do you really need a study to say that -- >> no. >> -- if we're spending a lot of money on debt service, paying interest on stuff we have accrued, do you really need a study to say that isn't going into more productive uses elsewhere and it would be good if we weren't paying that as interest? >> i'm not sure that was the actual point. i think it was more about the actual debt level. somehow there was a magical -- >> number around 90%, and that became the bench point. >> more is worse. 100 is worth than 90. >> this is a disastrous error. this paper has been a fundamental -- >> bench mash the last three or four years. >> i read a reply yesterday. he said that the conclusions for the new one is the same.

what they didn't emphasize is even though there were factual errors in their paper, which they said some of the factual errors they pointed out is this was updated information. but they said, yes, they admitted they made a mistake but said that the new study also found the same point. once you get above 90% it still hurts growth. i guess that's a big question. >> you get to the magic barrier and suddenly growth evaporates and it's up 2%. we're dealing with very few cases. anybody who worked with big excel spreadsheets can breathe a sigh of relief. >> the question is why -- >> rogoff for goodness sake. >> why did invite them on, by the way. >> why would you guys do that in terms of trying to greece or azerbaijan. you come one a nothing answer

because it doesn't apply. now you might be able to do a study of industrialized nations. by the way, even if you did so it would be a different nation purchase that's completely different. i would rather compare the united states today with the uk in the 19th century because they were both similar in that they provided the current seufplt the rules are different. you may go through this exercise and you may come up positive or negative. it doesn't matter. >> it's a very good point. the reality is that the world glommed on to this study. i used it myself. and the question i have for steve is ultimately between ken and reinhart does it undermine the study? hopefully we will have them on the broadcast. >> i think it does. i think what's interesting is there is a peer review process in academics economics. and i do not know the extent to which that paper went through it.

the error was found by three researchers trying to duplicate the results. set the spreadsheet and how the process works. the question is why it took so long. >> everyone we all come at it from the belief structures. maybe 90% is the threshold. everybody looks at it and says, see, they're wrong. we all know you can't spend as much as you want. the money is better served in the private sector. this is very unfortunate. we say forget about it. it's all hog wash. it's not. >> how long have i told you that the economics nobel prize isn't even a nobel prize. dismal science. we have people in talking about like it's physics or molecular biology. >> let me ask you a question. if you asked a physicist how

long it would take -- >> physics, okay. >> what would he say? you assume a value, joe. >> you have no particle act accelerator. you can find out certain things about physics steve. economics, all bets are off. >> the point is most economists take -- >> he can have a nobel prize for a guy who is way over here. both of them are right because economics are crap. >> when the economists went to do what you asked a physicist to do, they would both do the same thing. >> what percentage of economists go right from the middle and look at things will balanced and then come up with a conclusion? it's a very small percentage. that's why most of the studies are hogwash. >> it's a pseudo science. it's like psychology.

you read psychologist today, steve? >> hold on, joe. two guys make a mistake in the spreadsheet. >> no. i don't believe any of it. how many times have we talked about it? remember that lady we had on. >> falsification in some of the other papers. >> i can't even believe you can peer review economics papers because they're so subjective. anyway, thank you. i'm stopping you. we have done this so many times. i'm with you, ariel even though you have that ugly jacket on. >> it's not ugly. >> that's subjective too. andrew? >> let's get back to science, journalism of course. steve, jim, guys, thank you very much. when we come back, an early warning system for colon cancer. this is a less in vasive way to determine if you need further tests, but it's interesting. wait until you hear the details. you don't know what you have to do for this.

we've been watching shares. they are a little low this morning. whoa, they're done a lot lower. the ceo of exact sciences why right after this. first, an emotional night in boston. bruins hosting the first major sporting event since the tragic bombings of monday's marathon. this was an incredibly wonderful rendition before the game. the entire audience picked up and sang through. ♪

colon cancer is one of the most preventable cancers. only 50% of americans get tested. but there is a new screening technology. it would be great if we could get it to work really well. we had data, kevin, on a test are you actually test your stool. you ship it off, ups or fedex. do a test to see whether there's a chance that you have colon

cancer. the results came out. it worked. it met the end points. it was 42%. explain that 42%. >> sure. let me say, thanks for having me on the show. >> you're welcome. >> 50,000 people in the year die from colon cancer. >> it is detectable. >> journal of national cancer institute said this is the most preventable yet least prevented of all cancers. >> right. >> the key to curing this disease is actually preventing it. >> right. >> the way you prevent it is detect it in precancer stage like cervical cancer. >> like polyps. >> the rate of cervical cancer plummeted by maybe 90%. with a test that detects 47%. >> women go and get pap smears and people don't go and do colon

cancer tests. >> 80% of women get screened for cervical cancer. that's why we need a nonin vasive test to get more people screened. >> so the test is the colonoscopy. we need one that's easier which is what you're try to say. >> that's exactly right. you said 47%. you got 42%. >> what is the 42%? >> 42% of all the patients with precancerous polyps came back with a test positive. the important thing to know is they take about 8 to 10 years. really slow growing. as they grow in size, our test becomes more accurate. so it becomes more predictive. or it's positive at 66% for the two centimeter polyps that are most likely to progress to cancer. >> you just said, though before we came back on screen, this is not a replacement for

colonoscopy. my guess is people who use this will feel confident in the results if they got them and would not get a colonoscopy. >> at multiple times in a 10-year period, colonoscopy is offered once every 10 years. there can be interval cancers in between those colonoscopies. this test would be every three years, very similar to a pop smear so over time you find the precancerous polyps. >> at what wage would you start using this. >> today the recommendation is age 50. >> would you be able to see something earlier? >> the study was between the ages of 50 and 84. we think over time the guidelines will come down. especially if you have a nonin vasive way of screening.

>> it is not that interesting, pair tp paraphernalia. >> this is at home simple collection of a simple. much easier than other ways. >> you put it on the toilet. this container comes out. you pour in a dna preservative, screw on the lid, and it's safe. it's secure. it doesn't smell. it goes into a container. >> you don't do this after -- >> you can't miss, joe. i promise you can't miss. >> okay, good. and you overnight. >> that's right. >> you get a result back to your physician in under a week. >> you said two centimeters? >> two centimeter polyps this test detects.

>> they're still polyps, not cancer. >> still polyps. >> even a two centimeter polyp may be two to five years away from cancer. over time you end up detecting up to 90% of those precancerous polyps just like the pap smear. >> how much does this test cost versus colonoscopy. >> the price hasn't been determined yet. we're spending $14 billion in this country. 75% by medicare to treat colon cancer. >> what's a colonoscopy cost? >> private payers, $2,500. it's the most expensive screening test available. >> i assume this has to be a fraction of that to make it work. >> this is going to be a lot less expensive. >> you're not the first to market? >> there is nobody to the world that has developed a stool test that detects precancerous polyps.

>> nobody has done that yet? >> no. a stool test today only detects blood. and you typically only have blood if you have cancer. >> and the market looked at this as a huge disappointment. we looked at shares before we brought you on. it's down. >> down three. so they wanted 50%? what did they want? >> i think that the market expected 50% predetection of cancer overall. one data point is the larger polyp detection of 66% is really positive and in line with what was published in the gastroenterology journal in february of last year. we think the overall impact of this test -- >> who do you need to persuade to do this, doctors or people? >> both. so first and foremost, physicians and the large groups that employ today more and more of the primary -- >> but those physicians, i can understand people saying, yes, i want to do that, but they have a

lot tied into the colonoscopies where they make a lot of money. >> you end up going to get a colonoscopy because your primary care physician recommends that you detecting for precancer? something on the surface of a precancerous cell? >> we are looking for dna that's altered, that's being shed from these small polyps and cancer. so dna, plus peophemoglobin. >> specific to a colon cancer gene. >> that's right. >> is there a way to make it better? >> this test over time can -- by itself today with this data is really powerful. >> kevin, thank you. appreciate it. you can take that with you though. i had the full thing. i thought it was fun.

i loved the drug and -- the night before was interesting. but it's cleansing. madonna does it like four times a year, i think. >> full colon cleanse. >> have you in. >> i have not. i have not. i did the juicing cleanse. eventuallily. coming up, jim cramer joins us with a round-up of the week's winners and losers. back in a moment. tomorrow on "squawk box" -- quarterly results from general electric and mcdonald's. plus, we'll talk about the drop in gold with guest host dennis gartman. "squawk box" starts tomorrow at 6:00 a.m. eastern.

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welcome back to "squawk." let's get down to the new york stock exchange. our good friend jim cramer joins us now. good morning, jim. if jim is there. there he is. do you hear jim? >> no, there's no audio. now do you hear us? we are here on the tv. here we are. i don't know if we can get to jim or not, but it sounds like we can't. in the meantime, we'll go to a break, come back and see what we can do. when we come back we'll talk

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revenue fell short of expectations and shares are down 30 cents, which on a $3 stock, we'd call that sharply. >> that we would. let's get the last word from henry. sorry we couldn't get jim cramer to talk to us as well. but i was going to ask him about two earnings reports this morning. i didn't know if you'd spent time looking at them. both pepsi and morgan stanley and whether you have views on either. >> i have not. good questions for jim. >> good questions for jim but less so for henry. >> nokia is still a burning platform, still in trouble. >> where are you on apple? >> i think at this point, apple, the stock, looks attracter. people are price pentagon now as if it is going to become nokia. that is possible. it happened to nokia. it happened to blackberry but i think it is less likely than the market seems to think right now. >> what do you think of microsoft right now? >> long time i don't see a strategy. nothing they are doing to get

into this smartphone/tablet wave and get out of the pc business is working right now. >> we had intel earnings yesterday or the day before, not so great either. are you as negative and bearish on an intel? >> the pc business is tag nasta at best. everything is going to tablets and smartphones. even apple's numbers will tell you they are cannibalizing these things. people want tablets and smartphones and moving away from desk tops. a lot of these companies have just missed that transition. >> anything in tech? you don't like facebook. >> google! you got to like google. google's core business is still solid and they're being very aggressive. they're doing the right thing for the long term but that often bothers investors in the short term. they're investing in fiber, they're trying to kill cable companies in these different markets. that's expensive. >>